As The Going Gets Tough, The FCC Gets Going

Two posts ago, I was speaking about the FCC’s plan to do away with all analog communication networks (nationally) within this decade.

What I did not discuss or fully comprehend at the time of my post was the broadband carriers universal dislike (stronger words like “hate”, and less polite words could be inserted here) of the details of the plan and the effect it would have on thier ability to control the market and charge rates with no regulatory oversight.

Some history: For the sake of my carpal syndrome, I have paraphrased some of the following 5 paragraphs from wikipedia.

The original Communications Act of 1934 was the statutory framework for U.S. communications policy, covering telecommunications and broadcasting. That act created the Federal Communications Commission, which was to implement and administer the economic regulation of the interstate activities of the telephone monopolies and the licensing of spectrum used for broadcast and other purposes.

In the 1970s and 1980s, a combination of technological change, court decisions, and changes in U.S. policy permitted competitive entry into some telecommunications and broadcast markets. In this context, the Telecommunications Actwas designed to further open up markets to competition by removing unnecessary regulatory barriers to entry. Its stated objective was to open up markets to competition by removing regulatory barriers to entry: The conference report refers to the bill “to provide for a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced services and information technologies and services to all Americans by opening all telecommunications markets to competition. Congress was attempting to create a regulatory framework for the transition from primarily monopoly provision to competitive provision of telecommunications services”.

However, in retrospect, the de-regulations led to a concentration of media ownership with fewer broadcasters competing in regional markets and the elimination of many local, independent and alternative media outlets.

The Act was approved by the 104th Congress on January 3, 1996 and signed into law on February 8, 1996 by President Bill Clinton.

The Act makes a significant distinction between providers of telecommunications services (colloquially referred to as “Common Carriers”) and information services.  For example, a carrier is not a ‘telecommunications carrier’ when it is selling broadband Internet access. This distinction becomes particularly important because the act enforces specific regulations against ‘telecommunications carriers’ but not against carriers providing information services. With the convergence of telephone, cable, and Internet providers, this distinction has created much controversy.

The FCC has sought to undo some of the provisions of the telecommunications act of 1996. It wants to regulate (or more precisely “de-de-regulate”) the “Providers of Information Services”. Predictably, the FCC was sued by ComCast (the nations largest provider by far) and on April 6, 2010 won a ruling against the FCC in the Supreme Court:

One possible recourse for the FCC is to reclassify all broadband providers as “Common Carriers” just like regular telephone companies, which they can and do regulate. It would take an act of congress, and Republicans strongly oppose this idea.

This apparently is the path that the FCC has decided to walk. For a more in depth analysis on what this means, please see the well written article by Edward Wyatt in the NY Times:

The ability of the FCC to regulate the information carriers is essential to bring competition back into the market, where presently mergers and consolidation has left us a choice of just a few monolithic providers. In some geographical areas there is no choice at all.

Competition in the market place brings innovation and nimble, lean companies to the fore. This can easily be seen by looking at the market conditions in countries that are rated well above the US for Internet speed, pricing, availability and content.

Lets hope the FCC can get the job done without burying us under a ton of non-essential regulation. Let’s keep it lean people!

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